SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
__________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: July 10, 1996
Date of Earliest Event Reported: June 5, 1996
CORNING INCORPORATED
(Exact name of registrant as specified in its charter)
New York 1-3247 16-0393470
_________________________________________________________________
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
One Riverfront Plaza, Corning, New York 14831
_________________________________________________________________
(Address of principal (Zip Code)
executive offices)
(607) 974-9000
_________________________________________________________________
(Registrant's telephone number, including area code)
N/A
_________________________________________________________________
(Former name or former address, if changed since last report)
Item 5. Other Events.
On June 5, 1996, the Board of Directors of Corning
Incorporated (the "Company") declared a dividend of one preferred
share purchase right (a "Right") for each outstanding share of
common stock, par value $.50 per share (the "Common Shares"), of
the Company. The dividend is payable on July 15, 1996 (the
"Record Date") to the stockholders of record on that date. Each
Right entitles the registered holder to purchase from the Company
one one-hundredth of a share of Series A Junior Participating
Preferred Stock, par value $100 per share (the "Preferred
Shares"), of the Company at a price of $125 per one one-hundredth
of a Preferred Share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the
Company and Harris Trust and Savings Bank, as Rights Agent (the
"Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") have acquired beneficial
ownership of 20% or more of the outstanding Common Shares or (ii)
10 business days (or such later date as may be determined by
action of the Board of Directors prior to such time as any person
or group of affiliated persons becomes an Acquiring Person)
following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by a person or group of
20% or more of the outstanding Common Shares (the earlier of such
dates being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share
certificate with a copy of a Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution
Date (or earlier redemption or expiration of the Rights), the
Rights will be transferred with and only with the Common Shares.
Until the Distribution Date (or earlier redemption or expiration
of the Rights), new Common Share certificates issued after the
Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any
certificates for Common Shares outstanding as of the Record Date,
even without such notation or a copy of a Summary of Rights being
attached thereto, will also constitute the transfer of the Rights
associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution
Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common
Shares as of the close of business on the Distribution Date and
such separate Right Certificate alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on July 15, 2006 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless
the Rights are earlier redeemed or exchanged by the Company, in
each case, as described below.
The Purchase Price payable, and the number of Preferred
Shares or other securities or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred
Shares at a price, or securities convertible into Preferred
Shares with a conversion price, less than the then current market
price of the Preferred Shares or (iii) upon the distribution to
holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in Preferred
Shares) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights and the number of one one-
hundredths of a Preferred Share issuable upon exercise of each
Right are also subject to adjustment in the event of a stock
split of the Common Shares or a stock dividend on the Common
Shares payable in Common Shares or subdivisions, consolidations
or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights
will not be redeemable. Each Preferred Share will be entitled to
a minimum preferential quarterly dividend payment of $1 per share
but will be entitled to an aggregate dividend of 100 times the
dividend declared per Common Share. In the event of liquidation,
the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $100 per share but will be
entitled to an aggregate payment of 100 times the payment made
per Common Share. Each Preferred Share will have 100 votes,
voting together with the Common Shares. Finally, in the event of
any merger, consolidation or other transaction in which Common
Shares are exchanged, each Preferred Share will be entitled to
receive 100 times the amount received per Common Share. These
rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend,
liquidation and voting rights, the value of the one one-hundredth
interest in a Preferred Share purchasable upon exercise of each
Right should approximate the value of one Common Share.
In the event that the Company is acquired in a merger or
other business combination transaction or 50% or more of its
consolidated assets or earning power are sold after a person or
group has become an Acquiring Person, proper provision will be
made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common
stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise
price of the Right. In the event that any person or group of
affiliated or associated persons becomes an Acquiring Person,
proper provision shall be made so that each holder of a Right,
other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), will thereafter have the right
to receive upon exercise that number of Common Shares having a
market value of two times the exercise price of the Right.
At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of
50% or more of the outstanding Common Shares, the Board of
Directors of the Company may exchange the Rights (other than
Rights owned by such person or group which will have become
void), in whole or in part, at an exchange ratio of one Common
Share, or one one-hundredth of a Preferred Share (or of a share
of a class or series of the Company's preferred stock having
equivalent rights, preferences and privileges), per Right
(subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No fractional
Preferred Shares will be issued (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share,
which may, at the election of the Company, be evidenced by
depository receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Shares on
the last trading day prior to the date of exercise.
At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 20%
or more of the outstanding Common Shares, the Board of Directors
of the Company may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time on
such basis with such conditions as the Board of Directors in its
sole discretion may establish. Immediately upon any redemption
of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive
the Redemption Price.
The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of
the Rights, except that from and after such time as any person or
group of affiliated or associated persons becomes an Acquiring
Person no such amendment may adversely affect the interests of
the holders of the Rights.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
As of June 30, 1996, there were 230,049,543 Common Shares
issued and outstanding (excluding 29,321,524 Common Shares held
in the Company's treasury). As of such date an additional
11,082,836 Common Shares were reserved for issuance pursuant to
the Company's 1986, 1989 and 1994 Employee Equity Participation
Programs. One Right will be distributed to shareholders of the
Company for each Common Share owned of record by them on July 15,
1996. Until the Distribution Date, the Company will issue one
Right with each Common Share that shall become outstanding so
that all Common Shares will have attached Rights. The Company
has reserved 2,400,000 Preferred Shares for issuance upon
exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights
may cause substantial dilution to a person or group that attempts
to acquire the Company on terms not approved by the Board of
Directors of the Company, except pursuant to an offer conditioned
on a substantial number of Rights being acquired. The Rights
should not interfere with any merger or other business
combination approved by the Board of Directors since the Rights
may be redeemed by the Company at $.01 per Right prior to
acquisition by a person or group of beneficial ownership of 20%
or more of the Common Shares (effective at such time on such
basis with such conditions as the Board of Directors may
establish.)
The Rights Agreement dated as of June 5, 1996 between the
Company and the Rights Agent specifying the terms of the Rights
is attached hereto as an exhibit and incorporated herein by
reference. The foregoing description of the Rights is qualified
by reference to such exhibit.
Item 7. Exhibits.
1. Form of Rights Agreement, dated as of June 5, 1996,
between the Company and the Rights Agent.
2. Letter to the Company's shareholders, dated June 28,
1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
CORNING INCORPORATED
Registrant
Date: July 10,1996 By /s/ A. John Peck, Jr._____
A. John Peck, Jr.
Secretary
EXHIBIT 1
RIGHTS AGREEMENT
________________
CORNING INCORPORATED
and
HARRIS TRUST AND SAVINGS BANK
Rights Agent
________________
Dated as of June 5, 1996
TABLE OF CONTENTS
Page
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 7
Section 3. Issue of Right Certificates 7
Section 4. Form of Right Certificates 10
Section 5. Countersignature and Registration 11
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or
Stolen Right Certificates 12
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights 14
Section 8. Cancellation and Destruction of
Right Certificates 16
Section 9. Availability of Preferred Shares 17
Section 10. Preferred Shares Record Date 18
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights 19
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares 34
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power 34
Section 14. Fractional Rights and Fractional Shares 36
Section 15. Rights of Action 39
Section 16. Agreement of Right Holders 40
Section 17. Right Certificate Holder Not Deemed a
Stockholder 41
Section 18. Concerning the Rights Agent 42
Section 19. Merger or Consolidation or Change of
Name of Rights Agent 43
Section 20. Duties of Rights Agent 44
Section 21. Change of Rights Agent 48
Section 22. Issuance of New Right Certificates 50
Section 23. Redemption 50
Section 24. Exchange 52
Section 25. Notice of Certain Events 55
Section 26. Notices 56
Section 27. Supplements and Amendments 57
Section 28. Successors 58
Section 29. Benefits of this Agreement 59
Section 30. Severability 59
Section 31. Governing Law 59
Section 32. Counterparts 60
Section 33. Descriptive Headings 60
Signatures 60
Exhibit A - Form of Right Certificate
Exhibit B - Summary of Rights to Purchase Preferred
Shares
Agreement, dated as of June 5, 1996, between Corning
Incorporated, a New York corporation (the "Company"), and
Harris Trust and Savings Bank (the "Rights Agent").
The Board of Directors of the Company has authorized
and declared a dividend of one preferred share purchase right
(a "Right") for each Common Share (as hereinafter defined) of
the Company outstanding on July 15, 1996 (the "Record Date"),
each Right representing the right to purchase one one-hundredth
of a Preferred Share (as hereinafter defined), upon the terms
and subject to the conditions herein set forth, and has further
authorized and directed the issuance of one Right with respect
to each Common Share that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms
are hereinafter defined).
Accordingly, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of
this Agreement, the following terms have the meanings indi
cated:
(a) "Acquiring Person" shall mean any Person (as
such term is hereinafter defined) who or which, together with
all Affiliates and Associates (as such terms are hereinafter
defined) of such Person, shall be the Beneficial Owner (as such
term is hereinafter defined) of 20% or more of the Common
Shares of the Company then outstanding, but shall not include
the Company, any Subsidiary (as such term is hereinafter
defined) of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company, or any entity holding
Common Shares for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Common
Shares by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares
beneficially owned by such Person to 20% or more of the Common
Shares of the Company then outstanding; provided, however, that
if a Person shall become the Beneficial Owner of 20% or more of
the Common Shares of the Company then outstanding by reason of
share purchases by the Company and shall, after such share
purchases by the Company, become the Beneficial Owner of any
additional Common Shares of the Company, then such Person shall
be deemed to be an "Acquiring Person". Notwithstanding the
foregoing, if the Board of Directors of the Company determines
in good faith that a Person who would otherwise be an
"Acquiring Person", as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvert
ently, and such Person divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no
longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person
shall not be deemed to be an "Acquiring Person" for any
purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), as in effect on the
date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner"
of and shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Af
filiates or Associates beneficially owns, directly or
indirectly;
(ii) which such Person or any of such Person's Af
filiates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary
agreements with and between underwriters and selling group
members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights,
exchange rights, rights (other than these Rights),
warrants or options, or otherwise; provided, however, that
a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, securities tendered pursuant to a
tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase
or exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy
or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (2) is not also
then reportable on Schedule 13D under the Exchange Act (or
any comparable or successor report); or
(iii) which are beneficially owned, directly or in
directly, by any other Person with which such Person or
any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (other than cus
tomary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the
proviso to Section 1(c)(ii)(B)) or disposing of any
securities of the Company.
Notwithstanding anything in this definition of Ben
eficial Ownership to the contrary, the phrase "then outstand
ing," when used with reference to a Person's Beneficial Own
ership of securities of the Company, shall mean the number of
such securities then issued and outstanding together with the
number of such securities not then actually issued and out
standing which such Person would be deemed to own beneficially
hereunder.
(d) "Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions in
State of New York are authorized or obligated by law or ex
ecutive order to close.
(e) "Close of business" on any given date shall mean
5:00 P.M., Chicago time, on such date; provided, however, that
if such date is not a Business Day it shall mean 5:00 P.M.,
Chicago time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the
Company shall mean the shares of common stock, par value $.50
per share, of the Company. "Common Shares" when used with
reference to any Person other than the Company shall mean the
capital stock (or equity interest) with the greatest voting
power of such other Person or, if such other Person is a Sub
sidiary of another Person, the Person or Persons which ulti
mately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set
forth in Section 3 hereof.
(h) "Final Expiration Date" shall have the meaning
set forth in Section 7 hereof.
(i) "Person" shall mean any individual, firm, cor
poration or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(j) "Preferred Shares" shall mean shares of Series A
Junior Participating Preferred Stock, par value $100 per share,
of the Company.
(k) "Redemption Date" shall have the meaning set
forth in Section 7 hereof.
(l) "Shares Acquisition Date" shall mean the first
date of public announcement by the Company or an Acquiring
Person that an Acquiring Person has become such.
(m) "Subsidiary" of any Person shall mean any cor
poration or other entity of which a majority of the voting
power of the voting equity securities or equity interest is
owned, directly or indirectly, by such Person.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with
Section 3 hereof, shall prior to the Distribution Date also be
the holders of the Common Shares) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until
the earlier of (i) the tenth day after the Shares Acquisition
Date or (ii) the tenth business day (or such later date as may
be determined by action of the Board of Directors prior to such
time as any Person becomes an Acquiring Person) after the date
of the commencement by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such
plan) of, or of the first public announcement of the intention
of any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares
for or pursuant to the terms of any such plan) to commence, a
tender or exchange offer the consummation of which would result
in any Person becoming the Beneficial Owner of Common Shares
aggregating 20% or more of the then outstanding Common Shares
(including any such date which is after the date of this
Agreement and prior to the issuance of the Rights; the earlier
of such dates being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for
Common Shares registered in the names of the holders thereof
(which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y)
the right to receive Right Certificates will be transferable
only in connection with the transfer of Common Shares. As soon
as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent
will, if requested, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares as
of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, a
Right Certificate, in substantially the form of Exhibit B
hereto (a "Right Certificate"), evidencing one Right for each
Common Share so held. As of the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights
to Purchase Preferred Shares, in substantially the form of
Exhibit B hereto (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of Common Shares as
of the close of business on the Record Date, at the address of
such holder shown on the records of the Company. With respect
to certificates for Common Shares outstanding as of the Record
Date, until the Distribution Date, the Rights will be evidenced
by such certificates registered in the names of the holders
thereof together with a copy of the Summary of Rights attached
thereto. Until the Distribution Date (or the earlier of the
Redemption Date or the Final Expiration Date), the surrender
for transfer of any certificate for Common Shares outstanding
on the Record Date, with or without a copy of the Summary of
Rights attached thereto, shall also constitute the transfer of
the Rights associated with the Common Shares represented
thereby.
(c) Certificates for Common Shares which become
outstanding (including, without limitation, reacquired Common
Shares referred to in the last sentence of this paragraph (c))
after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration
Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in a Rights Agree
ment between Corning Incorporated and Harris Trust and
Savings Bank, dated as of June 5, 1996 (the "Rights Agree
ment"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the princi
pal executive offices of Corning Incorporated. Under
certain circumstances, as set forth in the Rights Agree
ment, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. Corning Incorporated will mail to the holder
of this certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor. Under
certain circumstances, as set forth in the Rights Agree
ment, Rights issued to any Person who becomes an Acquiring
Person (as defined in the Rights Agreement) may become
null and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated with
the Common Shares represented by such certificates shall be
evidenced by such certificates alone, and the surrender for
transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases
or acquires any Common Shares after the Record Date but prior
to the Distribution Date, any Rights associated with such
Common Shares shall be deemed cancelled and retired so that the
Company shall not be entitled to exercise any Rights associated
with the Common Shares which are no longer outstanding.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase Preferred
Shares and of assignment to be printed on the reverse thereof)
shall be substantially the same as Exhibit A hereto and may
have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any
stock exchange on which the Rights may from time to time be
listed, or to conform to usage. Subject to the provisions of
Section 22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of one one-hundredths
of a Preferred Share as shall be set forth therein at the price
per one one-hundredth of a Preferred Share set forth therein
(the "Purchase Price"), but the number of such one one-
hundredths of a Preferred Share and the Purchase Price shall be
subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The
Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its Vice Chairman, its Chief
Executive Officer, its President, any of its Sector Presidents,
any of its Vice Presidents, or its Treasurer, either manually
or by facsimile signature, shall have affixed thereto the
Company's seal or a facsimile thereof, and shall be attested by
the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates
shall be manually countersigned by the Rights Agent and shall
not be valid for any purpose unless countersigned. In case any
officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and
delivered by the Company with the same force and effect as
though the person who signed such Right Certificates had not
ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any
person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign
such Right Certificate, although at the date of the execution
of this Rights Agreement any such person was not such an
officer.
Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office, books
for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates
and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates. Subject to the provisions of Sec
tion 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of busi-ness on
the earlier of the Redemption Date or the Final Expiration
Date, any Right Certificate or Right Certificates (other than
Right Certificates representing Rights that have become void
pursuant to Section 11(a)(ii) hereof or that have been
exchanged pursuant to Section 24 hereof) may be transferred,
split up, combined or exchanged for another Right Certificate
or Right Certificates, entitling the registered holder to
purchase a like number of one one-hundredths of a Preferred
Share as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall make
such request in writing delivered to the Rights Agent, and
shall surrender the Right Certificate or Right Certificates to
be transferred, split up, combined or exchanged at the
principal office of the Rights Agent. Thereupon the Rights
Agent shall countersign and deliver to the person entitled
thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment of a
sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case
of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to
the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to
the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights. (a) The registered holder of any
Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the
Right Certificate, with the form of election to purchase on the
reverse side thereof duly executed, to the Rights Agent at the
principal office of the Rights Agent, together with payment of
the Purchase Price for each one one-hundredth of a Preferred
Share as to which the Rights are exercised, at or prior to the
earliest of (i) the close of business on July 15, 2006 (the
"Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption
Date"), or (iii) the time at which such Rights are exchanged as
provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of
a Preferred Share purchasable pursuant to the exercise of a
Right shall initially be $125, and shall be subject to ad
justment from time to time as provided in Section 11 or 13
hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the
shares to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified
check, cashier's check or money order payable to the order of
the Company, the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Shares
certificates for the number of Preferred Shares to be purchased
and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests, or (B) requisition from
the depositary agent depositary receipts representing such
number of one onehundredths of a Preferred Share as are to be
purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company hereby directs
the depositary agent to comply with such request, (ii) when ap
propriate, requisition from the Company the amount of cash to
be paid in lieu of issuance of fractional shares in accordance
with Section 14 hereof, (iii) after receipt of such certifi
cates or depositary receipts, cause the same to be delivered to
or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be des
ignated by such holder and (iv) when appropriate, after re
ceipt, deliver such cash to or upon the order of the registered
holder of such Right Certificate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the
purpose of exercise, transfer, split up, combination or ex
change shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall
be cancelled by it, and no Right Certificates shall be issued
in lieu thereof except as expressly permitted by any of the
provisions of this Rights Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Right
Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Availability of Preferred Shares. The
Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Preferred
Shares or any Preferred Shares held in its treasury, the number
of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with
Section 7. The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all
Preferred Shares delivered upon exercise of Rights shall, at
the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable
shares.
The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of any
Preferred Shares upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which
may be payable in respect of any transfer or delivery of Right
Certificates to a person other than, or the issuance or
delivery of certificates or depositary receipts for the Pre
ferred Shares in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered
for exercise or to issue or to deliver any certificates or
depositary receipts for Preferred Shares upon the exercise of
any Rights until any such tax shall have been paid (any such
tax being payable by the holder of such Right Certificate at
the time of surrender) or until it has been established to the
Company's reasonable satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each
person in whose name any certificate for Preferred Shares is
issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase
Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a
date upon which the Preferred Shares transfer books of the
Company are closed, such person shall be deemed to have become
the record holder of such shares on, and such certificate shall
be dated, the next succeeding Business Day on which the
Preferred Shares transfer books of the Company are open. Prior
to the exercise of the Rights evidenced thereby, the holder of
a Right Certificate shall not be entitled to any rights of a
holder of Preferred Shares for which the Rights shall be
exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided
herein.
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights. The Purchase Price, the number of
Preferred Shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the
Preferred Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification
of the Preferred Shares (including any such reclassification in
connection with a consolidation or merger in which the Company
is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a), the Purchase Price in
effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital
stock issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time shall
be entitled to receive the aggregate number and kind of shares
of capital stock which, if such Right had been exercised
immediately prior to such date and at a time when the Preferred
Shares transfer books of the Company were open, he would have
owned upon such exercise and been entitled to receive by virtue
of such dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in the
event any Person becomes an Acquiring Person, each holder of a
Right shall thereafter have a right to receive, upon exercise
thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable, in accordance with
the terms of this Agreement and in lieu of Preferred Shares,
such number of Common Shares of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase
Price by the number of one one-hundredths of a Preferred Share
for which a Right is then exercisable and dividing that product
by (y) 50% of the then current per share market price of the
Company's Common Shares (determined pursuant to Section 11(d)
hereof) on the date of the occurrence of such event. In the
event that any Person shall become an Acquiring Person and the
Rights shall then be outstanding, the Company shall not take
any action which would eliminate or diminish the benefits
intended to be afforded by the Rights.
From and after the occurrence of such event, any
Rights that are or were acquired or beneficially owned by any
Acquiring Person (or any Associate or Affiliate of such Ac
quiring Person) shall be void and any holder of such Rights
shall thereafter have no right to exercise such Rights under
any provision of this Agreement. No Right Certificate shall be
issued pursuant to Section 3 that represents Rights bene
ficially owned by an Acquiring Person whose Rights would be
void pursuant to the preceding sentence or any Associate or
Affiliate thereof; no Right Certificate shall be issued at any
time upon the transfer of any Rights to an Acquiring Person
whose Rights would be void pursuant to the preceding sentence
or any Associate or Affiliate thereof or to any nominee of such
Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an
Acquiring Person whose Rights would be void pursuant to the
preceding sentence shall be cancelled.
(iii) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized but
unissued to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the Company
shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exercise of the
Rights. In the event the Company shall, after good faith
effort, be unable to take all such action as may be necessary
to authorize such additional Common Shares, the Company shall
substitute, for each Common Share that would otherwise be
issuable upon exercise of a Right, a number of Preferred Shares
or fraction thereof such that the current per share market
price of one Preferred Share multiplied by such number or
fraction is equal to the current per share market price of one
Common Share as of the date of issuance of such Preferred
Shares or fraction thereof.
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or
purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred
Shares or equivalent preferred shares at a price per Preferred
Share or equivalent preferred share (or having a conversion
price per share, if a security convertible into Preferred
Shares or equivalent preferred shares) less than the then
current per share market price of the Preferred Shares (as
defined in Section 11(d)) on such record date, the Purchase
Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of Preferred
Shares which the aggregate offering price of the total number
of Preferred Shares and/or equivalent preferred shares so to be
offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such
current market price and the denominator of which shall be the
number of Preferred Shares outstanding on such record date plus
the number of additional Preferred Shares and/or equivalent
preferred shares to be offered for subscription or purchase (or
into which the convertible securities so to be offered are
initially convertible); provided, however, that in no event
shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one
Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent. Preferred Shares owned by or held
for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed; and
in the event that such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not
been fixed.
(c) In case the Company shall fix a record date for
the making of a distribution to all holders of the Preferred
Shares (including any such distribution made in connection with
a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in Preferred Shares) or sub
scription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after
such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the then current
per share market price of the Preferred Shares on such record
date, less the fair market value (as determined in good faith
by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent)
of the portion of the assets or evidences of indebtedness so to
be distributed or of such subscription rights or warrants
applicable to one Preferred Share and the denominator of which
shall be such current per share market price of the Preferred
Shares; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of
the Company to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not
so made, the Purchase Price shall again be adjusted to be the
Purchase Price which would then be in effect if such record
date had not been fixed.
(d) (i) For the purpose of any computation here
under, the "current per share market price" of any security (a
"Security" for the purpose of this Section 11(d)(i)) on any
date shall be deemed to be the average of the daily closing
prices per share of such Security for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately
prior to such date; provided, however, that in the event that
the current per share market price of the Security is
determined during a period following the announcement by the
issuer of such Security of (A) a dividend or distribution on
such Security payable in shares of such Security or securities
convertible into such shares, or (B) any subdivision,
combination or reclassification of such Security and prior to
the expiration of 30 Trading Days after the ex-dividend date
for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each
such case, the current per share market price shall be
appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each
day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Security is not listed or
admitted to trading on the New York Stock Exchange, as reported
in the principal consolidated transaction reporting system with
respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted
to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or such other system then in use,
or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in
the Security selected by the Board of Directors of the Company.
The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business or,
if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Preferred Shares
shall be determined in accordance with the method set forth in
Section 11(d)(i). If the Preferred Shares are not publicly
traded, the "current per share market price" of the Preferred
Shares shall be conclusively deemed to be the current per share
market price of the Common Shares as determined pursuant to
Section 11(d)(i) (appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after
the date hereof), multiplied by one hundred. If neither the
Common Shares nor the Preferred Shares are publicly held or so
listed or traded, "current per share market price" shall mean
the fair value per share as determined in good faith by the
Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price; provided, how
ever, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest
cent or to the nearest one one-millionth of a Preferred Share
or one ten- thousandth of any other share or security as the
case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three years from the
date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to
Section 11(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of cap
ital stock of the Company other than Preferred Shares, there
after the number of such other shares so receivable upon ex
ercise of any Right shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred
Shares contained in Section 11(a) through (c), inclusive, and
the provisions of Sections 7, 9, 10 and 13 with respect to the
Preferred Shares shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price here
under shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-hundredths of a Preferred
Share purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of
the Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evi
dence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredths of a Preferred Share (cal
culated to the nearest one one-millionth of a Preferred Share)
obtained by (i) multiplying (x) the number of one one-
hundredths of a share covered by a Right immediately prior to
this adjustment by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price and (ii)
dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of
Rights, in substitution for any adjustment in the number of one
one-hundredths of a Preferred Share purchasable upon the
exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the
number of one one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated
to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make
a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made.
This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates
have been issued, shall be at least 10 days later than the date
of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant
to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights
to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all
the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for
herein and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a
Preferred Share issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may con
tinue to express the Purchase Price and the number of one one-
hundredths of a Preferred Share which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-hundredth
of the then par value, if any, of the Preferred Shares issuable
upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally
issue fully paid and nonassessable Preferred Shares at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made ef
fective as of a record date for a specified event, the Company
may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record
date of the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise
over and above the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver
to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those ad
justments expressly required by this Section 11, as and to the
extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the
Preferred Shares, issuance wholly for cash of any Preferred
Shares at less than the current market price, issuance wholly
for cash of Preferred Shares or securities which by their terms
are convertible into or exchangeable for Preferred Shares,
dividends on Preferred Shares payable in Preferred Shares or
issuance of rights, options or warrants referred to hereinabove
in Section 11(b), hereafter made by the Company to holders of
its Preferred Shares shall not be taxable to such stockholders.
(n) In the event that at any time after the date of
this Agreement and prior to the Distribution Date, the Company
shall (i) declare or pay any dividend on the Common Shares
payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by reclas
sification or otherwise than by payment of dividends in Common
Shares) into a greater or lesser number of Common Shares, then
in any such case (A) the number of one one-hundredths of a
Preferred Share purchasable after such event upon proper
exercise of each Right shall be determined by multiplying the
number of one one-hundredths of a Preferred Share so purchas
able immediately prior to such event by a fraction, the nu
merator of which is the number of Common Shares outstanding
immediately before such event and the denominator of which is
the number of Common Shares outstanding immediately after such
event, and (B) each Common Share outstanding immediately after
such event shall have issued with respect to it that number of
Rights which each Common Share outstanding immediately prior to
such event had issued with respect to it. The adjustments
provided for in this Section 11(n) shall be made successively
whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares. Whenever an adjustment is made as pro
vided in Section 11 or 13 hereof, the Company shall promptly
(a) prepare a certificate setting forth such adjustment, and a
brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for
the Common Shares or the Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to each holder
of a Right Certificate in accordance with Section 25 hereof.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power. In the event, directly or
indirectly, at any time after a Person has become an Acquiring
Person, (a) the Company shall consolidate with, or merge with
and into, any other Person, (b) any Person shall consolidate
with the Company, or merge with and into the Company and the
Company shall be the continuing or surviving corporation of
such merger and, in connection with such merger, all or part of
the Common Shares shall be changed into or exchanged for stock
or other securities of any other Person (or the Company) or
cash or any other property, or (c) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall
sell or otherwise transfer), in one or more transactions,
assets or earning power aggregating 50% or more of the assets
or earning power of the Company and its Subsidiaries (taken as
a whole) to any other Person other than the Company or one or
more of its wholly-owned Subsidiaries, then, and in each such
case, proper provision shall be made so that (i) each holder of
a Right (except as otherwise provided herein) shall thereafter
have the right to receive, upon the exercise thereof at a price
equal to the then current Purchase Price multiplied by the
number of one one-hundredths of a Preferred Share for which a
Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of
Common Shares of such other Person (including the Company as
successor thereto or as the surviving corporation) as shall
equal the result obtained by (A) multiplying the then current
Purchase Price by the number of one one-hundredths of a
Preferred Share for which a Right is then exercisable and
dividing that product by (B) 50% of the then current per share
market price of the Common Shares of such other Person
(determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer;
(ii) the issuer of such Common Shares shall thereafter be
liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such issuer; and (iv)
such issuer shall take such steps (including, but not limited
to, the reservation of a sufficient number of its Common Shares
in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to the Common Shares thereafter deliverable
upon the exercise of the Rights. The Company shall not
consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such issuer shall have
executed and delivered to the Rights Agent a supplemental
agreement so providing. The Company shall not enter into any
transaction of the kind referred to in this Section 13 if at
the time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such
transaction, would eliminate or substantially diminish the
benefits intended to be afforded by the Rights. The provisions
of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated
transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if
the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed
on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are
not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market
maker is making a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the Board of
Directors of the Company shall be used.
(b) The Company shall not be required to issue
fractions of Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share)
upon exercise of the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than fractions
which are integral multiples of one one-hundredth of a
Preferred Share). Fractions of Preferred Shares in integral
multiples of one one-hundredth of a Preferred Share may, at the
election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a
depositary selected by it; provided, that such agreement shall
provide that the holders of such depositary receipts shall have
all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Shares
represented by such depositary receipts. In lieu of fractional
Preferred Shares that are not integral multiples of one one-
hundredth of a Preferred Share, the Company shall pay to the
registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one
Preferred Share. For the purposes of this Section 14(b), the
current market value of a Preferred Share shall be the closing
price of a Preferred Share (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the
Right expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right (ex
cept as provided above).
Section 15. Rights of Action. All rights of action
in respect of this Agreement, excepting the rights of action
given to the Rights Agent under Section 18 hereof, are vested
in the respective registered holders of the Right Certificates
(and, prior to the Distribution Date, the registered holders of
the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common
Shares), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his own
behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for
any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief
against actual or threatened violations of the obligations of
any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every
holder of a Right, by accepting the same, consents and agrees
with the Company and the Rights Agent and with every other
holder of a Right that:
(a) prior to the Distribution Date, the Rights will
be transferable only in connection with the transfer of the
Common Shares;
(b) after the Distribution Date, the Right Cer
tificates are transferable only on the registry books of the
Rights Agent if surrendered at the principal office of the
Rights Agent, duly endorsed or accompanied by a proper in
strument of transfer; and
(c) the Company and the Rights Agent may deem and
treat the person in whose name the Right Certificate (or, prior
to the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the
associated Common Shares certificate made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected
by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate
shall be entitled to vote, receive dividends or be deemed for
any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on
the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be con
strued to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice
of meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised
in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Com
pany agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise
and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part
of the Rights Agent, for anything done or omitted by the Rights
Agent in connection with the acceptance and administration of
this Agreement, including the costs and expenses of defending
against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur
no liability for, or in respect of any action taken, suffered
or omitted by it in connection with, its administration of this
Agreement in reliance upon any Right Certificate or certificate
for the Preferred Shares or Common Shares or for other
securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowl
edged, by the proper person or persons, or otherwise upon the
advice of counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of
Name of Rights Agent. Any corporation into which the Rights
Agent or any successor Rights Agent may be merged or with which
it may be consolidated, or any corporation resulting from any
merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or corporate trust powers of
the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part
of any of the parties hereto; provided, that such corporation
would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time
such successor Rights Agent shall succeed to the agency created
by this Agreement, any of the Right Certificates shall have
been countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned; and
in case at that time any of the Right Certificates shall not
have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have
the full force provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right Certificates
shall have been countersigned but not delivered, the Rights
Agent may adopt the countersignature under its prior name and
deliver Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name;
and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this
Agreement.
Section 20. Duties of Rights Agent. The Rights
Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of
which the Company and the holders of Right Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opin
ion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established by
the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by
any one of the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Treasurer or
the Secretary of the Company and delivered to the Rights Agent;
and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it
under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to
the Company and any other Person only for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained
in this Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same,
but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any re
sponsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be re
sponsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section
11(a)(ii) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for
in Section 3, 11, 13, 23 or 24, or the ascertaining of the
existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice that such
change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any Preferred Shares to
be issued pursuant to this Agreement or any Right Certificate
or as to whether any Preferred Shares will, when issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, exe
cute, acknowledge and deliver or cause to be performed, exe
cuted, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and di
rected to accept instructions with respect to the performance
of its duties hereunder from any one of the Chairman of the
Board, the Vice Chairman, the Chief Executive Officer, the
President, any Sector President, any Vice President, the
Secretary or the Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or
suffered by it in good faith in accordance with instructions of
any such officer or for any delay in acting while waiting for
those instructions.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal
in any of the Rights or other securities of the Company or
become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to
the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and
continued employment thereof.
Section 21. Change of Rights Agent. The Rights
Agent or any successor Rights Agent may resign and be dis
charged from its duties under this Agreement upon 30 days'
notice in writing mailed to the Company and to each transfer
agent of the Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or
any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Shares or
Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to
make such appointment within a period of 30 days after giving
notice of such removal or after it has been notified in writing
of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of
the State of Illinois (or of any other state of the United
States so long as such corporation is authorized to do business
as a banking institution in the State of Illinois, in good
standing, having an office in the State of Illinois, which is
authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by
federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of
at least $50 million. After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent
any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed neces
sary for the purpose. Not later than the effective date of any
such appointment the Company shall file notice thereof in
writing with the predecessor Rights Agent and each transfer
agent of the Common Shares or Preferred Shares, and mail a
notice thereof in writing to the registered holders of the
Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights
Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or
kind or class of shares or other securities or property pur
chasable under the Right Certificates made in accordance with
the provisions of this Agreement.
Section 23. Redemption. (a) The Board of Directors
of the Company may, at its option, at any time prior to such
time as any Person becomes an Acquiring Person, redeem all but
not less than all the then outstanding Rights at a redemption
price of $.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring
after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). The redemption of the
Rights by the Board of Directors may be made effective at such
time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights
pursuant to paragraph (a) of this Section 23, and without any
further action and without any notice, the right to exercise
the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such
redemption; provided, however, that the failure to give, or any
defect in, any such notice shall not affect the validity of
such redemption. Within 10 days after such action of the Board
of Directors ordering the redemption of the Rights, the Company
shall mail a notice of redemption to all the holders of the
then outstanding Rights at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent
for the Common Shares. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption
Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24
hereof, and other than in connection with the purchase of
Common Shares prior to the Distribution Date.
Section 24. Exchange. (a) The Board of Directors
of the Company may, at its option, at any time after any Person
becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of
Section 11(a)(ii) hereof) for Common Shares at an exchange
ratio of one Common Share per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Not
withstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any such Subsidiary, or
any entity holding Common Shares for or pursuant to the terms
of any such plan), together with all Affiliates and Associates
of such Person, becomes the Beneficial Owner of 50% or more of
the Common Shares then outstanding.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to paragraph (a) of this Section 24 and without any
further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of Common
Shares equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly
give public notice of any such exchange; provided, however,
that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the holders
of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the
Common Shares for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 11(a)(ii)
hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all
such action as may be necessary to authorize additional Common
Shares for issuance upon exchange of the Rights. In the event
the Company shall, after good faith effort, be unable to take
all such action as may be necessary to authorize such
additional Common Shares, the Company shall substitute, for
each Common Share that would otherwise be issuable upon
exchange of a Right, a number of Preferred Shares or fraction
thereof such that the current per share market price of one
Preferred Share multiplied by such number or fraction is equal
to the current per share market price of one Common Share as of
the date of issuance of such Preferred Shares or fraction
thereof.
(d) The Company shall not be required to issue
fractions of Common Shares or to distribute certificates which
evidence fractional Common Shares. In lieu of such fractional
Common Shares, the Company shall pay to the registered holders
of the Right Certificates with regard to which such fractional
Common Shares would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a
whole Common Share. For the purposes of this paragraph (d),
the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this
Section 24.
Section 25. Notice of Certain Events. (a) In case
the Company shall propose (i) to pay any dividend payable in
stock of any class to the holders of its Preferred Shares or to
make any other distribution to the holders of its Preferred
Shares (other than a regular quarterly cash dividend), (ii) to
offer to the holders of its Preferred Shares rights or warrants
to subscribe for or to purchase any additional Preferred Shares
or shares of stock of any class or any other securities, rights
or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only
the subdivision of outstanding Preferred Shares), (iv) to
effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or
more transactions, of 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole)
to, any other Person, (v) to effect the liquidation,
dissolution or winding up of the Company, or (vi) to declare or
pay any dividend on the Common Shares payable in Common Shares
or to effect a subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise than by payment
of dividends in Common Shares), then, in each such case, the
Company shall give to each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of
such stock dividend, or distribution of rights or warrants, or
the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to
take place and the date of participation therein by the holders
of the Common Shares and/or Preferred Shares, if any such date
is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least 10
days prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and in the case
of any such other action, at least 10 days prior to the date of
the taking of such proposed action or the date of participation
therein by the holders of the Common Shares and/or Preferred
Shares, whichever shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii)
hereof shall occur, then the Company shall as soon as
practicable thereafter give to each holder of a Right Cer
tificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe such
event and the consequences of such event to holders of Rights
under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized
by this Agreement to be given or made by the Rights Agent or by
the holder of any Right Certificate to or on the Company shall
be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Corning Incorporated
Corning, New York 14831
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the
Company or by the holder of any Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
Harris Trust and Savings Bank
311 West Monroe, 11th Floor
P.O. Box 755
Chicago, Illinois 60690
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Right Certificate shall be sufficiently given or made if sent
by first-class mail, postage prepaid, addressed to such holder
at the address of such holder as shown on the registry books of
the Company.
Section 27. Supplements and Amendments. The Company
may from time to time supplement or amend this Agreement
without the approval of any holders of Right Certificates in
order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or incon
sistent with any other provisions herein, or to make any other
provisions with respect to the Rights which the Company may
deem necessary or desirable, any such supplement or amendment
to be evidenced by a writing signed by the Company and the
Rights Agent; provided, however, that from and after such time
as any Person becomes an Acquiring Person, this Agreement shall
not be amended in any manner which would adversely affect the
interests of the holders of Rights.
Section 28. Successors. All the covenants and pro
visions of this Agreement by or for the benefit of the Company
or the Rights Agent shall bind and inure to the benefit of
their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in
this Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common
Shares).
Section 30. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void
or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired
or invalidated.
Section 31. Governing Law. This Agreement and each
Right Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of New York and for
all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts to be made
and performed entirely within such State.
Section 32. Counterparts. This Agreement may be
executed in any number of counterparts and each of such coun
terparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and
the same instrument.
Section 33. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and attested, all as of the
day and year first above written.
CORNING INCORPORATED
Attest:
By By
Title: Title:
Attest: HARRIS TRUST AND SAVINGS BANK
By By
Title: Title:
Form of Right Certificate
Certificate No. R- Rights
NOT EXERCISABLE AFTER JULY 15, 2006 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUB-
JECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
CORNING INCORPORATED
This certifies that , or regis
tered assigns, is the registered owner of the number of Rights
set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the Rights
Agreement, dated as of June 5, 1996 (the "Rights Agreement"),
between Corning Incorporated, a New York corporation (the
"Company"), and Harris Trust and Savings Bank (the "Rights
Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., New York time, on July 15,
2006 at the principal office of the Rights Agent, or at the
office of its successor as Rights Agent, one one-hundredth of a
fully paid non-assessable share of Series A Junior Partici
pating Preferred Stock, par value $100 per share (the
"Preferred Shares"), of the Company, at a purchase price of
$125 per one one-hundredth of a Preferred Share (the "Purchase
Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly exe
cuted. The number of Rights evidenced by this Right Certif
icate (and the number of one one-hundredths of a Preferred
Share which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number
and Purchase Price as of June 5, 1996, based on the Preferred
Shares as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of one one-
hundredths of a Preferred Share which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are
subject to modification and adjustment upon the happening of
certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of
the Right Certificates. Copies of the Rights Agreement are on
file at the principal executive offices of the Company and the
above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the
Rights Agent, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have en
titled such holder to purchase. If this Right Certificate
shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or
Right Certificates for the number of whole Rights not exer
cised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate (i) may be redeemed by the
Company at a redemption price of $.01 per Right or (ii) may be
exchanged in whole or in part for Preferred Shares or shares of
the Company's Common Stock, par value $.50 per share.
No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-hundredth of
a Preferred Share, which may, at the election of the Company,
be evidenced by depositary receipts), but in lieu thereof a
cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled
to vote or receive dividends or be deemed for any purpose the
holder of the Preferred Shares or of any other securities of
the Company which may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such,
any of the rights of a stockholder of the Company or any right
to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice
of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised
as provided in the Rights Agreement.
This Right Certificate shall not be valid or obliga
tory for any purpose until it shall have been countersigned by
the Rights Agent.
WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal. Dated as of ,
199_.
ATTEST: CORNING INCORPORATED
By
Name: Name:
Title: Title:
Countersigned:
HARRIS TRUST AND SAVINGS BANK
By
Name:
Title:
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the within
Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: , 199_
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the Na
tional Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office or correspondent in the
United States.
- ------------------------------------------------------------
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially owned
by an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
Signature
- -------------------------------------------------------------
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: CORNING INCORPORATED
The undersigned hereby irrevocably elects to exercise
Rights represented by this Right
Certificate to purchase the Preferred Shares issuable upon the
exercise of such Rights and requests that certificates for such
Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the
balance remaining of such Rights shall be registered in the
name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: , 199_
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the Na
tional Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office or correspondent in the
United States.
Form of Reverse Side of Right Certificate -- continued
- -------------------------------------------------------------
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially owned
by an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
Signature
- -------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of
Election to Purchase, as the case may be, must conform to the
name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in the
Form of Assignment or the Form of Election to Purchase, as the
case may be, is not completed, the Company and the Rights Agent
will deem the beneficial owner of the Rights evidenced by this
Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On June 5, 1996, the Board of Directors of Corning
Incorporated (the "Company") declared a dividend of one pre
ferred share purchase right (a "Right") for each outstanding
share of common stock, par value $.50 per share (the "Common
Shares"), of the Company. The dividend is payable on July 15,
1996 (the "Record Date") to the stockholders of record on that
date. Each Right entitles the registered holder to purchase
from the Company one one-hundredth of a share of Series A
Junior Participating Preferred Stock, par value $100 per share
(the "Preferred Shares"), of the Company at a price of $125 per
one one-hundredth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights
are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and Harris Trust and Savings Bank, as
Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a
public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") have acquired ben
eficial ownership of 20% or more of the outstanding Common
Shares or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such
time as any person or group of affiliated persons becomes an
Acquiring Person) following the commencement of, or announce
ment of an intention to make, a tender offer or exchange offer
the consummation of which would result in the beneficial
ownership by a person or group of 20% or more of the out
standing Common Shares (the earlier of such dates being called
the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Share certificates outstanding as
of the Record Date, by such Common Share certificate with a
copy of this Summary of Rights attached thereto.
The Rights Agreement provides that, until the Dis
tribution Date (or earlier redemption or expiration of the
Rights), the Rights will be transferred with and only with the
Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share
certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date
(or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares
outstanding as of the Record Date, even without such notation
or a copy of this Summary of Rights being attached thereto,
will also constitute the transfer of the Rights associated with
the Common Shares represented by such certificate. As soon as
practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will
be mailed to holders of record of the Common Shares as of the
close of business on the Distribution Date and such separate
Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire on July 15, 2006 (the "Final
Expiration Date"), unless the Final Expiration Date is extended
or unless the Rights are earlier redeemed or exchanged by the
Company, in each case, as described below.
The Purchase Price payable, and the number of Pre
ferred Shares or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend
on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Pre
ferred Shares of certain rights or warrants to subscribe for or
purchase Preferred Shares at a price, or securities convertible
into Preferred Shares with a conversion price, less than the
then-current market price of the Preferred Shares or (iii) upon
the distribution to holders of the Preferred Shares of
evidences of indebtedness or assets (excluding regular periodic
cash dividends paid out of earnings or retained earnings or
dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of
one one-hundredths of a Preferred Share issuable upon exercise
of each Right are also subject to adjustment in the event of a
stock split of the Common Shares or a stock dividend on the
Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring,
in any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the
Rights will not be redeemable. Each Preferred Share will be
entitled to a minimum preferential quarterly dividend payment
of $1 per share but will be entitled to an aggregate dividend
of 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares will
be entitled to a minimum preferential liquidation payment of
$100 per share but will be entitled to an aggregate payment of
100 times the payment made per Common Share. Each Preferred
Share will have 100 votes, voting together with the Common
Shares. Finally, in the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, each
Preferred Share will be entitled to receive 100 times the
amount received per Common Share. These rights are protected
by customary antidilution provisions.
Because of the nature of the Preferred Shares' div
idend, liquidation and voting rights, the value of the one one-
hundredth interest in a Preferred Share purchasable upon
exercise of each Right should approximate the value of one
Common Share.
In the event that the Company is acquired in a merger
or other business combination transaction or 50% or more of its
consolidated assets or earning power are sold after a person or
group has become an Acquiring Person, proper provision will be
made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common
stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise
price of the Right. In the event that any person or group of
affiliated or associated persons becomes an Acquiring Person,
proper provision shall be made so that each holder of a Right,
other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), will thereafter have the right
to receive upon exercise that number of Common Shares having a
market value of two times the exercise price of the Right.
At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person or
group of 50% or more of the outstanding Common Shares, the
Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will
have become void), in whole or in part, at an exchange ratio of
one Common Share, or one one-hundredth of a Preferred Share (or
of a share of a class or series of the Company's preferred
stock having equivalent rights, preferences and privileges),
per Right (subject to adjustment).
With certain exceptions, no adjustment in the Pur
chase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price.
No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of
a Preferred Share, which may, at the election of the Company,
be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of
the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the acquisition by a person or
group of affiliated or associated persons of beneficial own
ership of 20% or more of the outstanding Common Shares, the
Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). The redemption of the Rights may be made
effective at such time on such basis with such conditions as
the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board
of Directors of the Company without the consent of the holders
of the Rights, except that from and after such time as any
person or group of affiliated or associated persons becomes an
Acquiring Person no such amendment may adversely affect the
interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive
dividends.
A copy of the Rights Agreement has been filed with
the Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A dated June __, 1996. A copy
of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby incorporated
herein by reference.
EXHIBIT 2
[LETTERHEAD OF ROGER G. ACKERMAN]
June 28, 1996
Dear Shareholder:
I am writing to let you know that on June 5, 1996, your
Board of Directors renewed the Company's Preferred Share Purchase
Rights Plan adopted in 1986. The Rights Plan adopted in 1986
expires by its terms at the close of business on July 15, 1996.
At that time, the existing rights will expire and the new Rights
Plan will become effective.
In renewing the Rights Plan the Board has expressed its
determination that shareholders will have every opportunity to
participate fully in the long-term growth of the Company. In
this regard, one of the Board of Directors' responsibilities is
to respond to a takeover offer in a manner it determines to be in
the best interests of the Company. The Rights Plan is not
intended to prevent and will not prevent a takeover of the
Company that the Board of Directors determines to be in the best
interests of the Company.
The new rights, which are explained in some detail in the
attached summary and which are substantially similar to the
rights outstanding under the 1986 Rights Plan, will become
effective on July 15, 1996, will expire on July 15, 2006 and will
be subject to redemption by the Board of Directors at $.01 per
right at any time prior to the first date on which they become
exercisable.
A copy of the Rights Agreement filed with the Securities and
Exchange Commission is available to any shareholder upon request
to A. John Peck, Jr., Secretary, Corning Incorporated, One
Riverfront Plaza, Corning, New York 14831.
Sincerely,
H:\WORD\FORMS\SHARELTR.PP
CORNING INCORPORATED
PREFERRED SHARE PURCHASE RIGHTS PLAN
Summary of Terms
Form of Security: The Board of Directors has declared a dividend
of one preferred share purchase right for each
outstanding share of Corning's Common Stock,
payable to holders of record as of the close
of business on July 15, 1996 (each a "Right"
and collectively, the "Rights").
Transfer: Until the earlier to occur of (i) 10 days
following a public announcement that a person
or group of affiliated or associated persons
(an "Acquiring Person") has acquired
beneficial ownership of 20% or more of
Corning's outstanding Common Stock or (ii) 10
business days following the commencement of,
or announcement of an intention to make, a
tender offer or exchange offer which would
result in the beneficial ownership by a person
or group of 20% or more of the outstanding
Common Stock (the earlier of such dates being
the "Distribution Date"), the Rights will be
evidenced by the certificates for and will be
transferred with the Common Stock.
After the Distribution Date, the Rights Agent
will mail separate certificates evidencing the
Rights to each record holder of the Common
Stock as of the close of business on the
Distribution Date, and thereafter the Rights
will be transferable separately from the
Common Stock.
Exercise: Prior to the Distribution Date, the Rights
will not be exercisable.
After the Distribution Date, each Right will
be exercisable to purchase, for $125 (the
"Purchase Price"), one one-hundredth of a
share of Corning's Series A Junior
Participating Preferred Stock, par value $100
per share.
Flip-In: If any person or group becomes an Acquiring
Person, then each Right (other than Rights
beneficially owned by the Acquiring Person and
certain affiliated persons) will entitle the
holder to purchase, for the Purchase Price, a
number of shares of Corning's Common Stock
having a market value of twice the Purchase
Price.
Flip-Over: If, after any person has become an Acquiring
Person, (1) Corning is involved in a merger or
other business combination in which Corning is
not the surviving corporation or its Common
Stock is exchanged for other securities or
assets or (2) Corning and/or one or more of
its subsidiaries sell or otherwise transfer
assets or earning power aggregating more than
50% of the assets or earning power of Corning
and its subsidiaries, taken as a whole, then
each Right will entitle the holder to
purchase, for the Purchase Price, a number of
shares of common stock of the other party to
such business combination or sale having a
market value of twice the Purchase Price.
Exchange: At any time after any person has become an
Acquiring Person (but before any person
becomes the beneficial owner of 50% or more of
Corning's Common Stock), the Board of
Directors may exchange all or part of the
Rights (other than the Rights beneficially
owned by the Acquiring Person and certain
affiliated persons) for shares of Common Stock
at an exchange ratio of one share of Common
Stock per Right.
Redemption: The Board of Directors may redeem all of the
Rights at a price of $.01 per Right at any
time prior to the time a person or group
becomes an Acquiring Person. The redemption
may be made effective at such time, on such
basis and upon such conditions as the Board of
Directors determines.
Expiration: The Rights will expire on July 15, 2006,
unless earlier exchanged or redeemed.
Amendments: Prior to the Distribution Date, the Rights
Agreement may be amended in any respect.
After the Distribution Date, the Rights
Agreement may be amended in any respect that
does not adversely affect the Rights holders
(other than any Acquiring Person and certain
affiliated persons).
Voting Rights: Rights holders have no rights as a stockholder
of the Company, including the right to vote
and to receive dividends.
Adjustment and
Antidilution
Provisions: The Rights Agreement includes a number of
provisions dealing with adjustments and
antidilution designed to prevent efforts to
diminish the efficacy of the Rights.
Taxes: While the dividend of the Rights will not be
taxable to stockholders or to Corning,
stockholders or Corning may, depending upon
the circumstances, recognize taxable income in
the event that the Rights become exercisable
as set forth above.
H:\WORD\FORMS\SUMMARY.PP
